Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame

Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame [1906] 2 Ch 34 is a UK company law case, which concerns the enforceability of provisions in a company's constitution.

Warrington J held that on the true construction of the articles that unless directions were given through special resolution, then it was impossible for a mere majority to override the views of the directors.

You have, no doubt, in theory and law one entity, the company, which might be a principal, but you have to go behind that when you look to the particular position of directors.

It is by the consensus of all the individuals in the company that these directors become agents and hold their rights as agents… There are provisions by which the minority may be overborne, but that can only be done by special machinery in the shape of special resolutions.Cozens Hardy LJ agreed.

He said that going back to the root principle which governs these cases under the Companies Act 1862... [it] seems to me that the shareholders have by their express contract mutually stipulated that their common affairs should be managed by certain directors to be appointed by the shareholders in the manner described by other articles, such directors being liable to be removed only by special resolution.